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Table of Contents
DISCLAIMER: This newsletter is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
Please check out our glossary for explaining the acronyms, financial terminology, and economic data.
1. YXI Dashboard
Thursday was a marginally negative day for stocks, with SPY and QQQ down only 0.25 standard deviations from their 1-year vol. Both are just 1% below their all-time highs.
IBIT, AMZN, and MSFT are below their 50-day MAs, which means there is short-term pressure for a down trend.
Macro Assets Intraday
On an intraday basis, IBIT and USO both rallied just before 11 am ET and managed to stay relatively bid throughout the day. There was moderate selling pressure in IBIT towards the NY Close.
All Mag-7 stocks were being sold after the NY Open, except TSLA. TSLA stayed bid throughout the session, closing on a high note. We also observe afternoon bidders for META, which rallied to a flat session.
2. Spotlight: META
Today we shine a spotlight on META, looking at its long-term seasonalities and short-term trends.
META YTD vs Past 10 Years
YTD, META is up 30%, which is a decent return versus the indices. However, compared with the past 10 years, this YTD return is very much in the middle of the ball park.
META Monthly Returns Past 10 Years
September tends to be a seasonally weak month, but META has bucked the trend in 2024 and 2025. A positive September has always been followed by a positive October over the past decade.
META - Historical 10-day Forward Returns
The historical forward 10-day return on September 25 (today) is a positive 1.5%. Between now and mid-October, the market is usually benign for META.
META Average Weekday Returns - Past 26 Weeks
META trades particularly well on Mondays and Wednesdays. There is heightened downside tail risk for Thursdays and Fridays.
Meta 20-day Volatility In Past 10 Years
September and early October are usually calm for META. Late October through to late November we likely see more volatility.
META Correlations with SPY and TLT
META trades with a moderately positive correlation to SPY but neturally with TLT.
META Follow-through Analysis (Since 2018)
META tends to perform very well over any 3-month horizon, but the short-term returns after big up days (>5% or >99th percentile volume) tend to be mixed. In this sense, buying the dip is more effective over a short horizon.
META Big Up Days
META’s latest big rally came in July - up 11% on July 31st.
It declined by 5% in the next month, but the 3-month historical record looks very favourable.
META 5-minute returns during the past 20 sessions
Over the past 20 sessions, META tended to get heavily sold around 9:40-10 am. Buyers could wait for the end of this window for execution.
Wednesday was an unnoteworthy, flat session.
3. Cycles, Fractal
META Cycles Analysis - 3 Years Data
Using our proprietary asset cycles analysis, we observe that META is still in an upward cyclical move going into October.
The pink line represents the dominant cycle, which peaks at the end of the year. The orange line is the combined top 3 cycles, which may amplify or offset each other.
Overall, META doesn’t face a cyclical headwind in the near term
Fractal Analysis (New)
I have been building a proprietary fractal analysis, in which we try to find similarities of today’s price action and historical price actions.
We observe a high similarity between the past 6 months and late 2017 - early 2018. In the 2018 scenario, META rose strongly in the subsequent 4-5 months.
Note on how the fractal analysis works:
We transform recent returns into a fractal signature by combining detrended-fluctuation analysis (multi-scale DFA/Hurst) and a compact power spectrum (PSD), then z-normalising across scales.
A dist value below 0.1 indicates strong similarity between the current and historical fractal signatures — in other words, the patterns are mathematically close, with only minimal difference.
Even if the absolute price levels or long-term trends look different, a low dist still signals similarity because the metric compares the shape of daily return patterns, not the raw levels.
4. S&P 500 and Nasdaq (SPY & QQQ)
SPY
SPY experienced another terrible session on Wednesday, closing among the bottom 3 sessions of the past 20 days.
There is a significant amount of put buying in the indices, with the overall market positioned for a potential pullback. We have a well-tested trendline as the first support, followed by the 50-day MA.
QQQ
The potential pullback in wave (iv) of 3 has a shallow support at the 50-day MA, with a heavy volume profile for further support in the $548-567 region.
5. FOMC Projections, Treasury Yields, TLT, USO
FOMC Projections
We utilise the Fed Funds futures market to gauge market expectations for future FOMC interest rate decisions.
The Fed Funds projections have moved 5 bp higher overnight, as the market pares back some of the dovish bets.
US Treasury Yield Curve
The overall yield curve is steeper than last week (long-end yields higher), although not by much.
US 30Y Yield
The near-term pressure remains down here, as the 30-year struggles to get past the 200-day MA in red. There is an imminent death cross as the 50-day MA approaches the 200-day.
TLT
A mirror image to yields, TLT has enjoyed a golden cross with the 50-day MA crossing the 200-day recently. We should find the medium-term trendline (in black) supporting TLT in the near term.
USO
The USO is catching bids amid the latest geopolitical tensions in Europe. We could be trading within a range of $71 to $81 in the near term.
6. Crypto
ETH is updated every Monday. COIN is updated every Tuesday. HOOD is updated every Wednesday.
BTC
I am not a crypto bear, but the latest price action of Bitcoin does concern me for another near-term leg down. The shape of the rally in September suggested a corrective wave b bounce.
For the bullish alternative structure to stay, Bitcoin must hold $110k (the 0.786 retrace of the September rally). Dipping beyond that could open the door all the way to $100k.
HOOD
HOOD has now reached our minimum wave 5 target of $130. While technically it can stretch higher towards $140, the risk-reward for chasing the trade is not attractive.
7. Gold
GLD
GLD suffered the worst trading session of the past 20 days on Wednesday.
GLD reached our wave v target this week. I expect a pullback from here. However, it is still too early to conclude that a big bull cycle has topped.
8. Large Cap Equities
Apple: AAPL
AAPL hits resistance at the 1.236 extension of wave i, pulling back in line with the indices. But I still expect the wave iii target of $264 to be reached in the near term.
Amazon: AMZN
AMZN saw another terrible session on Wednesday, with the near-term chart turning bearish.
My primary concern is that AMZN is in a 5-wave down motion of wave c of (iv).
This means the next bounce could be a wave 4 bounce to the downside, followed by 1 more low to challenge the 200-day MA.
However, at the end of wave c, it presents a good entry oppportunity.
Alphabet: GOOGL
GOOGL is finally rolling over for the wave (iv) pullback.
The gap at $210 may not get filled in this pullback, with the initial wave (iv) target being $215.
Meta: META
META’s earlier bounce was in a 3-wave shape, a likely wave b here. This means there is still a strong potential for one more low in wave (c), which could breach the $700 mark.
META is directionally bullish in the medium term.
Microsoft: MSFT
It is unclear whether wave (b) has finished for MSFT, but the overall chart appears bearish in the near term, with potential to form a lower low in the $460s.
Nvidia: NVDA
NVDA is being supported by the 50-day MA, but is likely in a wave (c) of iv pullback here. $160 presents a good entry for the subsequent wave v.
Tesla: TSLA
TSLA enjoyed a top 3 session on Wednesday among the past 20 days.
One cannot rule out a further extension of wave (iii), which reached the 1.618 extension of wave (i). I am simply highlighting the pullback zone here, should TSLA take a turn with the broader market.
$400 presents the easiest psychological support in the next pullback (although still 10% from here), while $378 to me is the deeper end of the potential retrace.
Palantir: PLTR
PLTR experienced the second-worst session on Wednesday in the past month.
Right now, it is unclear whether this pullback is the end of a wave b rally in September (i.e. we expect a lower low next), or a simple correction en route to wave 5.
I do expect clarity soon. Simply watching the market for now.
9. Selected ETFs
Semiconductor: SOXX
SOXX has been exceptionally strong in the past month. However, the run does begin to look extended for wave (v) of iii.
10. Trade Updates & Monitoring
Live Trades
Instrument | Current Price | Trigger Date | Nature | Entry | Target | Invalidation |
264.43 | Dec 17, 2024 | 1 Year + | 236 | 387 | 189 | |
41.56 | Apr 14, 2025 | Months | 31 | 45 | 27 |
12. Notable ETF Flows From the Previous Day
Recent Notable Flows (% of AUM)
The flows are represented as a percentage of the AUM prior to the flow.
Ticker | AUM ($M) | Flow % AUM | Flow % AUM | Flow % AUM |
|---|---|---|---|---|
XOP | 1892 | 4.03% | 6.33% | -2.98% |
DUST | 137 | 4.87% | 12.04% | 107.44% |
ARKK | 8563 | -11.23% | -6.14% | 2.46% |
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